Brazilian shares rose, to end the week on an up note ahead of next week’s U.S. presidential election. Stocks gained strength from positive corporate news.
Latin American Equities Post Solid Gains
Bovespa, US presidential elections
Jeremy Simon
Brazil’s Petrobras Tell Central Bank: ‘Mind Your Own Business’
Market
Brazilian shares rose, to end the week on an up note ahead of next week’s U.S. presidential election. Stocks gained strength from positive corporate news.
Brazil’s benchmark Bovespa Index gained 123.68 points, or 0.54%. Brazilian issues rose ahead of the U.S. election and a long holiday weekend for the local market, with the All Souls Day holiday on Tuesday expected to keep domestic volume light on Monday.
Shares of Brazil’s leading shoemaker, Grendene SA, leapt in their initial public offering debut on the São Paulo stock exchange.
In the news, Brazilian state-run oil company Petrobras reasserted its authority over the country’s fuel prices, reassuring investors that it will not be swayed by political considerations.
Petrobras stated that it is solely responsible for setting domestic fuel prices and urged the Central Bank to tend to its own affairs.
The bank’s interest rate committee had earlier suggested that local fuel prices were lagging behind the price of global crude oil and that it might set price parameters in 2005, a statement which Petrobras dismissed as “beyond its prerogative as an agent for monetary policy.”
Many analysts expect the oil company to authorize a further local gasoline price increase some time after the second round of Brazil’s municipal elections this week, following a price hike at refineries by 2.4% in mid- October.
On the earnings front, electric power utility Cemig announced that its third-quarter net profit climbed 36% to 378 million reais on higher prices and greater sales, as net revenue advanced 11% to 1.59 billion reais. Buyers were active in response.
Amid research notes, a major investment bank raised its stance on Brazilian pulp company Aracruz Celulose to “buy” from “sell.” Also, the U.S.’s Weyerhaeuser said it purchased a two-thirds stake in an Aracruz unit.
Brazil experienced a consolidated public sector primary budget surplus of 6.04 billion reais in September, well below the 10.93 billion reais surplus in August, but enabling the country to move comfortably above a target of 56.9 billion reais for the first nine months of the year agreed on with the International Monetary Fund.
The latest result brought the primary surplus to 69.8 billion reais for January through September.
Thomson Financial Corporate Group
www.thomsonfinancial.com/
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